Archive for September 22nd, 2010

Why The Hyper Rich Hates The Poor

September 22, 2010




Abstract: The rage of the hyper rich against the poor is real. Even biological. It is pure, raw human ethology. As pure evil as evil can get. Turning people into carpets can be good, but, under normal circumstances, it should not be legal. And that is why the plutocracy is busy at work, destroying normalcy.



Fund managers such as the billionaire Stephen Schwarzman pay tax rates on most of their income at a 15% rate. Simple mortals have to do with huge tax rates instead, closer to 50% (once the "payroll tax", social security tax, federal, states, if not city, are counted). The hyper rich have often their mansions in some locale which allows them to avoid more taxes. And so on. In other words, in the USA, anti-patriotic crimes of the hyper rich are now legal.

The obvious proposal, made for many years by myself, is to make the hyper rich pay normal tax rates, those that receptionists, secretaries and janitors pay (see below how it would be done). It has been known by civilized people, for 10,000 years, that the mathematical function called the exponential requires to tax wealth more, just for wealth inequality not to get so much out of hand that so much wealth gets in so few hands that the economy stops existing. Neolithic tax legislators discovered the exponential millennia before mathematicians did. Trust neo-fascist economists to forget it carefully. Maybe they should remove it from the mathematical programs at school.

Finally Obama vaguely uttered the suggestion of closing a technical interpretation of the tax code that allows hedge funds managers to cheat on their taxes (namely the ridiculously low tax rates for "carried interest").

Of course, Obama did not need to do that: he could have given an executive order to Geithner (oops, sorry, I forgot Geithner himself refused to pay for 40,000 dollars of taxes he owed, on the ground that three years had passed; he is now chief of the IRS, among other things; when thieves lead, crimes are legal).

In any case, Mr. Schwarzman, head of the Blackstone Group, a giant financial conglomerate, declared at a private board meeting of a "nonprofit" organization about Obama’s suggesting that he paid tax at the same rate as everybody else: "It’s a war. It’s like when Hitler invaded Poland in 1939."

Four obvious remarks: 1) It’s like Schwarzman does not have a brain.

2) "Non Profits" are another trick of the hyper rich to exert power without paying taxes. It’s mostly, all too often, about fake charity, real power, and no taxes, while staying in 5 star hotels, worldwide. Another base plot of the plutocrats, and please be informed, as a hint of a proof, that the foundation law was passed at the same time as the income tax law during World War One (when the rates rose vertically from 2% to 77%!).

3) Supposing Schwarzman has a brain, he does not know history, and insults the memory of those who fell victim to it. That people with such influence can utter such dramatic obscenities is symptomatic of a sinking civilization.

4) For hyper rich Americans, paying less taxes than the people out there is a moral imperative. It’s deeply immoral to raise taxes on the hyper rich, just as it was immoral for Hitler to invade Poland (killing therein six million Poles).

[See more on financiers’ anger in notes.]



People who think more about their decisions have more brain cells in their frontal lobes, research just published in Science has discovered. People who are good at thinking about thinking (metathinking!) are PHYSIOLOGICALLY different.

In other words, different thinking, and different characters, lead to create humans who are so different, they are phenotypically different species.

The question naturally arise about the obverse. Can the political process create inferior species of humans? Obviously yes; if thinking about thinking is actively discouraged, as it is in the USA, one may end up with a society where people can’t think, because the crucial grey matter just is not there. A society where Obama is viewed as an intellectual or even a constitutional law professor (never mind that he orders the political assassination of citizens, those who nominated him can’t probably tell the difference between a frog’s croak and the constitution).

In the last 30 years, plutocracy has captured the political process, especially in the USA, making the minds themselves compatible with its rule. ( The process progressively gathered power in the last 500 years, as Francois I, Charles V, and the English monarchs got entangled with the hyper rich, to finance themselves; this led in the 18C to the invention of the privately managed fractional reserve system .)

In the present USA, one metaprinciple of correct behavior has become that, in good company, full bodied males will only talk about scores of sport teams. Enforced brain behavior has become very different from what it was when the demos was fully active in the polis, and therefore talking politics was the national sport (as it still is in some countries, such as France).

We have seen that before. This is a classical phenomenon. In the Sixth Century, in Constantinople, the mental life was all about the Blues, and the Greens, competing chariot teams. The involvement in these sports was so intense it led to massive riots, where thousands got killed. The emperor Justinian himself thought about abdicating when he mulled over the on-going riots .

That insane passion about watching sports, an obsession about nothing, was in replacement, and complete contrast with the passion for politics in Byzantium, a thousand years earlier. Why the psychological replacement? Because in a dictatorship those who have power dictate, and the people obey, but do not talk back. Hence the people are deprived of the power of dialogue, debate, dialectic, and, as far as the dictator or plutocracy is concerned, it is crucial that the prohibition of debate perdures, and talking back does not occur.

Mental activity is thus corralled into innocent pasture, talking about nothing. This mental and civilizational retardation tends to become an irreversible mental condition. Obsessive talking and worrying about team sports has thus been, for two millennia, a marker of the capture of minds by the mighty few.

It is no coincidence that Obama bounded with Gibbs by talking about sport. It is not just religion which is the opium of the people. Obsessive sport talking about teams displaces the natural obsession of the prehistoric group about whether it is scoring in its environment, especially against other human groups.



More superficial than the master behaviors, are the master ideas. One master idea, that the hyper rich imposed on the people, was that the hyper rich would be taxed ever less. After all, the hyper rich provide with jobs and charity, plus the edifying spectacle of its splendid superiority.

Another master idea was that massive immigration, by bringing a lot of servants, would make the USA more powerful ("A rising tide lifts all boats").

That a massive influx of the uncouth from overseas would also have the added benefit of diluting democracy was not mentioned. But Rome also used that trick, democratic dilution. The USA gained about 30 million (yes thirty million) in ten years. Mostly through immigration. California went from 17 millions in 1976 to 38 millions in 2010. California also has an unemployment rate close to 13%, directly related to the immigration tsunami (“a rising tsunami washes off all boats”). When one goes around in California, away from a few superficial window dressing, one often gets the impression that it was all ultra modern… in 1950. And has not changed since.

The spirit of the state of law implicitly contains the notion of equality. By refusing to pay their fair share of taxes, the share that prevents them to get ever richer without doing any work, the hyper rich flouts the notion of equality.

The clout of the rich, scoffing at the state of law, happened in the later phase of the Roman empire, as the rich retreated to their estates, defended by their private armies, keeping the tax collectors away. This made the public sector of the empire collapse. In particular law, order, and the military.

Soon Roman politicians had to make deals, even military deals, with small, but well armed invaders, including the Huns! At some point six Senatorial families owned most of North Africa. The most amazing part is that this extraordinary state of affairs benefited already Seneca under Nero, but that nobody seems to have connected it to the incapacity of the empire to defend itself against Germans under Marcus Aurelius, less than a century later (although it’s well known Marcus could not finance the war, and had to sell palace cutlery to do so).

Under Reagan, the theory that the rich are sacred came to be known as "trickle down" economics. Under Clinton, a new twist was added, never seen in the history of civilization. The enormous money making power of the state, through private banks, already a scandal nobody looks at, was harnessed to feed the derivative world, a parallel universe where real money was funneled to create fake profits. by mastering reality itself through a derivative universe, the plutocracy morphed into something much more dangerous, capable of greater propaganda.



Krugman observed that the propaganda justifying lower taxes for the rich has gone mainstream (NYT, September 19, 2010):

The rage of the rich has been building ever since Mr. Obama took office. At first, however, it was largely confined to Wall Street. Thus when New York magazine published an article titled “The Wail Of the 1%,” it was talking about financial wheeler-dealers whose firms had been bailed out with taxpayer funds, but were furious at suggestions that the price of these bailouts should include temporary limits on bonuses.

Some may find that rage curious. Obama has bent over backwards to please the hyper rich. Instead of changing the tax structure within the first week, as he had the votes to try to do, Obama did nothing.

Moreover, Obama made giant gifts of all kind, in the trillions, to transfer public money to private banks and other financial "institutions" (in a deliberately misleading contrivance, private company, if they are publicly traded, are called "public" in the USA, and private for profit companies are called "institutions", if they are big enough). The TARP inspector said in summer 2010 that the gifts to the private banks went over 3.7 trillion dollars. So why all the rage of the hyper rich against their pet? This is a psychological question, and Krugman does not answer it.

An obvious observation is that Obama has been weak, so weak that he has proven he can be pushed to the right, ever more, and with him the entire political system of the USA has been pushed to the right. One needs some passion to animate that quest of the neo-conservatives towards neo-fascism. Average Americans are timid mental creatures: they have been indoctrinated that way at school. The hyper rich, by getting all enraged, may hope to impress the commons so much, that they will intellectually collapse and reduce to spiritual crepe batter.



But the explanation goes further than that. The rage of the hyper rich has to do with the phenomenon known as Evil.

Speaking of evil, a stupid essay in the philosophical series "The Stone" of the New York Times, suggested to kill all the carnivores, using the weasel question: "Would the controlled extinction of carnivorous species be a good thing?", as a hook. The essay was a typical wishy-washy balanced act about nothing. Left unsaid was the fact that man is the planet’s top predator, a family of species that rose to supremacy through meat eating, so eliminating carnivores means killing humankind. That puts the guy who wrote the piece lower on the scale of theoretical ethics than Adolf Hitler himself.

Thus, indeed, in a preliminary step, the essay in the New York Times, implied: "Would the controlled extinction of Jews be a good thing?" The essay does not seem as sedate, from this perspective.

Verily, Evil is necessary, but it has to be controlled by Humanity, to optimize, Humanity. Evil is one thing Humanity does, and needs, but Humanity does not reduce to Evil. However, as its name indicates, plutocracy is pure Evil.



I avoid the concept of “aristocracy”, because it is flattering –it means rule of the best– and generally inaccurate. Far from being the best, so called self described “aristocrats were often the worst. In general, the concept of “plutocracy” is much more appropriate to qualify what has been historically designed as “aristocracy”.

Alexander the Great, for example, was not the best. He was, rather, the worst. He was just a genocidal maniac, as he proved by annihilating in a holocaust the Greek City-State of Thebes, a democracy.

Alexander committed this crime against humankind, to terrify the Greeks. Alexander was just the son of his fascist father, at the head of a vast fascist, plutocratic association of gangsters who fought Athens after the death of Alexander, and won, with the active participation of the hyper rich in Athens.

The result was an eclipse of democracy that lasted 2,000 years, holding back human progress in all ways.

The European feudal aristocracy, which transmogrified from Roman imperial “aristocracy” (those with the best assassination teams) was also mostly an hereditary plutocracy, which was carefully wrapped around their version of “god”, their great fascist in the sky (entangling a fascist god and the commander in chief an idea created and developed by Roman emperors, centuries before Constantine).



Why not to restrict long term capital gains 15% rate only to those making less than a million dollar yearly income? Did Obama think about that? And to replace the 15% rate, above that, by normal income tax? This way the hyper rich would get to pay the same rate, above one million dollar of income as, say, firemen.

One has to remember that the fractional reserve system has given private bankers what used to be the privilege of the state, creating money. Thus the hyper rich got from the state a powerful instrument no one else has. By the very moral system they advocate, that everything has a price, it is only normal that they would pay something for this extravagant privilege.

One can refine this proposal by distinguishing whether the hyper rich at hand profited or not from state help; for example, Mr. Musk, getting huge sums from NASA, for his private rocket company, is another example of subsidies which ought to be paid for. The case of Boeing or Airbus getting subsidies is still another question: there millions, if not billions, of people profit, and we are dealing with Colbertism, not favoritism.

Allowing a few big financiers to create the money everybody uses is as absurd as when private individuals were endowed, by the state, to raise taxes for the state ( a system which, in the end, precipitated bloody revolutions in Europe).

It seems that Obama has understood some of this, as he suggested the creation of a national infrastructure bank. Simply it should be 500 billion dollars to start with, not 50 billion (by comparison, the war activities of the USA cost one trillion dollars a year).

Another long time suggestion of mine is a tiny tax on financial transactions. Piling up financial transactions is not an absolute good, but an absolute distraction. I explained, in the past, that it would be analogous to the speed of light as universal speed limit, and, similarly, it would enforce causality.

Also such a tax would bring huge revenues, as many revenues grabbed away from the financial vultures. Oxfam has analyzed the details recently and found that a half of a thousandth tax (.05 %!) would bring at least 500 billion Euros/Dollars. This would be as much money grabbed away from the powerful "pervert band" that want to re-establish a full new feudalism. (In Oxfam, Ox is for Oxford, and fam, for famine; the hyper rich are indeed in the process of promoting famine, worldwide…)



Back to the question Krugman did not answer. In the USA, the hyper rich got what they wanted, and always more of it, in the last thirty years: ever less taxes, ever more distanciation between them and the middle class, satisfying their impression of superiority. Now Obama is doing his seduction dance to the left, like a toothless cobra, and the hyper rich only knows he will deliver six more years of bromide to be spit in the left’s face. So why so much rage?

Why so much rage? Well, first of all, because rage is all what is left for them to express which has not proven unambiguously wrong: the trickle down theory has clearly, not worked for the majority of Americans. Their real median income has been going down for thirty years.

Another thing is that Americans are brainwashed into behaving like sheep in primary school. Expressing rage is big no-no in the USA. Thus, by doing so, the hyper rich acquire the high ground: they terrify, they impress, and how could they be wrong if they are so enraged? It is a variation of the Big Lie technique, dear to Hitler: the hyper rich express an exaggerated emotion, to get their way, and hope that, by doing so, they will make average people believe that they really believe they are in their right. Hitler’s argument that little people expect only little lies, so are unprepared for big lies, can indeed be adapted: little people in the USA expect little emotion, so, when confronted with huge emotions, they are unprepared to resist them, especially when they come from their leaders (because the hyper rich lead in the USA: the political apparatus, especially the US Senate, is just a rather cheap, but most profitable, appendage).

Another reason for the rich to be genuinely enraged. The rich is enraged because the rich has got away with what they knew they ought not to have get away with. Then they learned to justify this unfairness by modifying their sense of fairness, and now they know nothing else. Dubious justification for past orgy has become virtuous expectation for ongoing repast.

By taking away their special absurdly low taxes, one does not just reduce their future riches and power, one also takes away their perceived rectitude. The rectitude they project, and the rectitude they perceive about themselves. Hyper rich Americans are ‘philanthropists" remember? they also say that about themselves. Not only that statement reduces their taxes, it augments their perception of themselves, it makes more of the world orbit around them. The hyper rich knows that plutocracy is good, they feel that plutocentrism is better. They should not just enjoy themselves, they should be celebrated.

The problem with Obama is that his best rhetoric, as found in this blog, cuts down on this sense of celebration. Under Obama, the rich becomes a problem. An abstract problem, but still a problem. The fact that Obama did not do anything about this problem has compounded the problem, because the rich feels irritated, not chastised. Obama has even humiliated them by suggesting that only him, Obama, "stands between them, and the pitchforks". They may want to prove they can take the pitchforks all by themselves.

Thus plutocracy feeds on itself not just mathematically, through the exponential function (the more riches, the easier it is to acquire more), but also psychologically, as it adapts its morality to viewing as moral, and normal, its past crimes, and the weakness with which it has been tolerated.

The behavior of the hyper rich, throughout history, is reminiscent of what happens when lions, or leopards, learn to feed on humans. In the beginning the predators are cautious, even afraid. Roman trainers gave their carnivores human meat to get them to appreciate it. But soon the ferocious beasts consider that human flesh is their due. That’s how man eaters are made; let them get away with it, and soon they know nothing else.

The obscene fund raising system of the USA makes things worse. And then the rich and their servants become petulant; see Obama making fun of his liberal critics at a $30,000 dollars "event at the home of Richard Richman" (!), for not applauding all the derivative loopholes the president prepared for his very rich friends he is so anxious to be accepted by.



Is there something more, in the behavior of the hyper rich? Why do they want ever more riches, ever more power in their hands, over the rest of humankind? This obscenity is completely obvious in the USA; the most useless of the hyper rich, the likes of Mr. Hedge Fund manager above, and the hyper wealthy bankers, got trillions for their operations, so they could give themselves hundreds of billions in bonuses, while Mr. Obama, misguided by the lamentable Lawrence Summers, spent only 50 billion dollars on the infrastructure stimulus, tat is, on jobs, over two years (calling it the "700 billion dollars stimulus"; for comparison, France spent as much on a special infrastructure stimulus, in 2009 alone!… And France has arguably already the world’s best infrastructure…)

The Romans used to say that Man Was A Wolf For Man. Unkind to wolves. In truth, paleontologically speaking, wolves had to fear hyenas, (cave) lions, all sorts of saber tooth predators, giant eagles, and man… Moreover, in the last few million years, the ferocious beasts first teaching to their children was to avoid man, at all and any cost.

But who predated on man? But who did man fear? Who maintained the numbers of human population within ecological sustainability? Well, man, could only fear man, and that is why man became frightening to man. And learned, genotypically, to love to exterminate man.

People such as Lawrence Summers exist, so that they can reduce the ecological footprint of other men, reducing them to misery, so that they consume less. In the past, such men would have outright eaten other people, as the fat kings of the Pacific used to. Human inherited psychobiology became the master of Evil, to save the earth, and thus, the species.

Thus, there is in man an instinct of destruction of other men. There is in man an instinct of destruction of man in the name of the world. This instinct goes all the way to self destruction (hence Hitler’s little adventure, teasing Britain and France in a war he was sure to lose).

This instinct of destruction is what animated the priestly class of the Aztecs (and it was pretty explicit, with the theory, and practice, of the "Flower Wars"). This is also why the Hebrew bible and the Arab Qur’an are so ferocious, or why Shiva creates and destroys, and why the Polynesians found each other so tasty, prepared as a luau. Not that the Polynesians had any choice; protein was rare, and saving the fish in the reef was more important than sparing the inhabitants of the valley next door.

When one cannot outright destroy others, one can at the very least oppress them, torture, them, humiliate them. Destruction has to start somewhere. That is why American plutocrats push for immigration of dozens of millions of aliens, while emigrating most American jobs to China: because it destroys the middle class.

The American plutocrats know just enough history to have determined that European plutocracy was brought down by European revolutions and rebellions by the middle class, a problem that will be prevented by destroying the middle class. First.

The hyper rich is driven by the instinct of destruction of humanity, an instinct way beyond the will to power. Ignore them, and that instinct, at your own risk.


Patrice Ayme